BlockBeats reported on Sept. 29 that Chloe, a columnist for HTX DeepThink and a researcher at HTX Research, said the coming seven days will hinge on whether markets can digest a higher cost of capital. The Federal Reserve raised rates by 25 basis points on Sept. 16 to 3.75%-4%, and this week’s data will directly shape expectations for both the size and duration of future hikes.
Her base case is that risk assets stay choppy and biased weaker, with internal divergence continuing. A sustained rebound, in her view, would first require some relief from the bond market.
U.S. equities face a narrow leadership problem
Chloe said the fragility in U.S. stocks lies in how concentrated the advance has become. As of Sept. 25, the S&P 500 was less than 1% below its record high, yet the equal-weight index had already fallen about 4% for the month. That, she said, shows that most stocks are already absorbing pressure from higher rates, while the headline index is being supported mainly by a small number of large-cap technology names.
If yields keep rising, earnings expectations would need to improve further to offset valuation compression. Even if the index rebounds, she said, it would still be difficult to say risk appetite has broadly recovered unless the equal-weight index improves as well.
Key data points this week: PCE, payrolls and PMI
The main tests ahead are the Sept. 30 PCE report, nonfarm payrolls on Oct. 2, and manufacturing and services PMI releases on Oct. 1 and Oct. 5.
Chloe described the most constructive mix as easing core inflation, moderate job growth and softer wage pressure. A sharp drop in employment, however, could trigger concern over earnings. She also singled out the long end of the Treasury curve as a crucial signal after any softer data release.
If short-end yields fall while long-end yields stay elevated, she said, that would indicate improving policy expectations are still not enough to ease long-term financing pressure. In that case, the room for a rebound in technology stocks would remain limited.
Crypto is watching spot demand as ETF inflows cool
On crypto, Chloe said spot demand has already been providing support, but incremental buying is slowing. According to Farside data, U.S. spot BTC ETFs posted cumulative net inflows of about $2.386 billion from Sept. 21 to 25. Daily inflows, however, dropped from $999 million to $135 million over those five trading days, and she said that move alone is still not enough to confirm a trend reversal.
If ETF inflows continue and both the dollar and yields stabilize, BTC could show more resilience than smaller-cap tokens, she said. If flows turn negative while futures open interest keeps expanding, declines could be amplified more easily by liquidations.
Rates remain the main driver
For the next seven days, Chloe said U.S. stocks should be judged by market breadth, while crypto should be judged by spot absorption. The broader direction, she said, still comes down to the path of interest rates.
The original article also noted that the content does not constitute investment advice, nor an offer, solicitation, or recommendation for any investment product.